The Cannabis Industry Weighs In On Historic Banking Legislation

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On Tuesday, the U.S. House of Representatives approved the Secure and Fair Enforcement (SAFE) Banking Act 321-103. It was considered a historic event because this is the first standalone cannabis policy reform bill to ever reach a House floor vote. The legislation overwhelmingly passed with bipartisan approval.
The House of Representatives voted 321 to 103, representing 79% of the vote, in favor of HR 1595. The YES votes represented 99% of the Democratic majority caucus and 47% of the Republican minority caucus.
The bipartisan SAFE Banking Act (H.R.1595) was introduced by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH), and Warren Davidson (R-OH), and it had 206 total cosponsors (including 108 original). The language’s goal was to address the state-legal cannabis industry’s lack of access to banking and other financial services. It provides a safe harbor from federal prosecution for financial institutions that offer services to state-legal cannabis businesses.
“We applaud the House for approving this bipartisan solution to the cannabis banking problem, and we hope the Senate will move quickly to do the same,” said Neal Levine, CEO of the Cannabis Trade Federation, which lobbied in support of the bill. “This vital legislation will have an immediate and positive impact, not only on the state-legal cannabis industry but also on the many communities across the nation that have opted to embrace the regulation of cannabis. Allowing lawful cannabis companies to access commercial banking services and end their reliance on cash will greatly improve public safety, increase transparency, and promote regulatory compliance.”

The next step is for the Senate to approve the legislation. That group has a companion version of the SAFE Banking Act (S.1200) that was introduced in April by Sens. Jeff Merkley (D-OR), Cory Gardner (R-CO) and a bipartisan group of 21 original cosponsors. It currently has 33 total cosponsors. Earlier this month, Senate Banking Committee Chairman Mike Crapo (R-ID) said his committee will take up the cannabis banking issue this year and is working on preparing a new bill.
“The SAFE Banking Act is about public safety, accountability and respecting states’ rights. Our federal banking laws were designed to prevent illicit activity and help law enforcement do their jobs. These laws need to be applied to legitimate marijuana businesses and employees in order to improve transparency and accountability and help root out illegal transactions. Most importantly, the SAFE Banking Act will get cash off our streets, reducing the risk of violent crime and making our communities safer,” said Rep. Ed Perlmutter (D-CO), who introduced the bill in this session. “While Congress has stuck its head in the sand for many years, this Committee has shown leadership on this issue and I want to thank my cosponsors and members of the Committee for their support.”
The Arcview Group CEO Troy Dayton said, “We are extremely encouraged by these cannabis reforms passed by the House. It would be a game-changer for this developing industry and we are hopeful that the Senate follows suit. Legal cannabis businesses, which employ more than 165,000 people, would finally be able to operate safely, develop and grow their businesses. This step forward begins to pave the way for legal, regulated cannabis businesses to open up a plethora of opportunities, which were previously unavailable. The measure would also have a profound, positive impact on the investment landscape, patients and consumers. For years, Arcview has been working towards and supporting this moment. We applaud the progress taken by our regulators and industry and look forward to more reforms being fully enacted.”
“We are extremely uplifted by the House vote on the SAFE Banking Act, but there is still work to be done,” said Andrew Berman, CEO of Harborside. “The Senate needs to swiftly act to adopt similar banking protections. In addition, Congress needs to approve the Marijuana Opportunity Reinvestment and Expungement Act that would start to repair the damage done by the decades of prohibition.”

Evan Eneman, CEO of the MGO | ELLO National Cannabis Alliance said, “Many of our cannabis clients openly struggle to establish banking relationships, with many of their accounts previously being closed due to the stigma of prohibition. Passage of SAFE Banking in the House is a major step toward ensuring that banks can operate hand-in-hand with cannabis companies out in the open versus previous ‘behind closed door’ interactions.”

Commenting on next steps, NORML Political Director Justin Strekal said: “Today’s vote is a significant first step, but it must not be the last. Much more action will still need to be taken by lawmakers. In the Senate, we demand that lawmakers in the Senate Banking Committee hold true to their commitment to move expeditiously in support of similar federal reforms. And in the House, we anticipate additional efforts to move forward and pass comprehensive reform legislation like The MORE Act — which is sponsored by the Chairman of the House Judiciary Committee — in order to ultimately comport federal law with the new political and cultural realities surrounding marijuana.”

Würk CEO Keegan Peterson said, “We are pleased with the House’s decision today. For too long, legal cannabis businesses have not had access to regular banking and payroll services they rely on to operate and grow their companies. The industry has been a job machine across many communities in the U.S. and now employs 250,000 Americans. Not having access to banking puts the incomes of these employees at risk and causes unnecessary financial challenges for business owners. We urge the Senate to follow the Houses’ lead and pass the SAFE Banking Act before the year is out.”

 

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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